ROTHERHAM BOROUGH COUNCIL - REPORT TO MEMBERS

1. Economic and Development Services Matters

2. 17 May 2004

3. Supertram Extensions

4. Originating Officer/Divisional Manager: - Ken Wheat, Transportation Unit Manager, Planning and Transportation Service, Ext. 2953 [email protected]

5. Issue

To update Members on discussions with the Department for Transport (DfT) and further study work on Supertram Extensions.

6. Summary

South Passenger Transport Executive [SYPTE] and their consultants have had discussions with DfT and arranged further study work. In the current climate there would seem to be insurmountable difficulties in moving forward with the network as originally envisaged. The strongest performing tram extension is that between Royal Hallamshire Hospital/ University and Rotherham Parkgate via Rotherham Town Centre and there is potential to fund the Government's required 25% local contribution. Further work is needed regarding how Waverley can be best connected into Sheffield and Rotherham.

7. Clearance/Consultation

A full public consultation exercise was undertaken in autumn 2003 and the results of the exercise were reported to Cabinet Member on 15 March 2004 (Council Minute 319). The Director General of the SYPTE held an informal meeting with the Executive Director Economic and Development Services and Cabinet Members in mid March and the matter was reported to the 1 April 2004 SYPTA meeting.

8. Timing

This report is for information only and does not require a decision. However, it is important that is able to indicate the direction it wishes to go in its Local Transport Plan (LTP) Annual Progress Report (APR) in June which is submitted to Government Office at the end of July. The PTE intend to hold meetings with all District Councils in the interim.

9. Background

Attached as Appendix A is a copy of the SYPTE's report to 1 April 2004 SYPTA. The full document including all the Appendices and Figures will be available at the meeting.

Discussion with DfT centred on 2 key issues:

• the robustness of the analyses carried out • the affordability of the schemes

Members are reminded that the PTA in May 2003 agreed to a reduced network combining 4 extensions into 2 lines:

• Ranmoor to Rotherham Parkgate via Rotherham Town Centre • Dore to Hellaby via Waverley/Orgreave

whilst bearing in mind the need for possible future extensions to the Dearne Valley (Manvers) and Northern General Hospital, Sheffield.

10. Argument

Since the report to May 2003 PTA and my report to Cabinet of 25 June 2003, the DfT has revised aspects of its guidance on light rail schemes. As a consequence of this and further comments on the detailed modelling work, the base case for the network was reworked and this showed a decrease in the overall benefit/cost ratio (BCR) for the full network from 1.27 to 1.06. Government uses such figures to assess and determine which schemes give value for money and therefore which schemes to support with grant funding. In this instance a BCR of 1.06 does not compare favourably with other schemes and priorities for investment and therefore it was considered there was a need to re-examine options.

The main focus of discussion with the DfT was affordability of light rail schemes. It is this aspect that has changed most in the last few months and since discussions were first held with DfT in 2003.

Factors influencing Government include:

• The likely outcome of the Government's Spending Review for the next period; • Requirements for investment in the rail network as a result of the Rail Regulator's decision on Track Access Charges and the general review of the rail industry; • Pressures on spending in other Government policy areas; • Competition from other transport investment schemes; • The Government's increasing concern over the value for money of light rail schemes, given the discussions they had been having in Autumn 2003/Spring 2004 with the promoters of schemes elsewhere in the country which are having to be re-evaluated in the light of increased cost estimates.

The DfT's position can best be described as that the Government still believes that light rail schemes perform an important role in an integrated transport network but those Authorities wishing to come forward with schemes should ensure that: -

• They are economically robust and the most appropriate and cost-effective solution for the problems they are trying to address; • They are capable of being funded and delivered. In particular, the DfT have strengthened their view that there must be a 25% local contribution to such schemes. A key dependency of the original decision of the PTA and Districts last summer was the ability for South Yorkshire to argue that there are special circumstances which might allow a lower level of intervention than 25% if the full network was to be developed. Discussions with the DfT, and others in the intervening period have indicated that this will be difficult. Nonetheless, the regeneration and economic benefits that flow from transport investment in order to support such arguments have been identified.

These realisations led the PTE to commission further consultancy study work on extension options which, although based on the original proposals, were truncated and somewhat less expensive. This might lead therefore to a greater chance of successfully achieving support from the DfT. Lower overall capital costs also reduce the extent of the potentially problematic 25% local contribution. In order to address the 'most appropriate and cost effective criteria, low cost and 'next best' options were also examined.

For each of the options originally under consideration, and those which have been subsequently explored as a consequence of discussions with the DfT, the study work has looked at three key indicators:

• The capital costs; • The difference between operating cost and the farebox revenue (this must be positive i.e. require no ongoing subsidy); • The economic 'net present value' (the difference between costs and benefits. It should be positive and be significant).

More details are given in Appendix A and the Consultant's report referred to in Section 15.

The conclusions that can be drawn from the analysis, based on the DfT guidance and discussions with them since the 25 June 2003 Cabinet report, are shown below.

Summary of Economic Appraisals

Network Mode Estimated Present Net Benefit Costs Value Present - Cost (£m) Benefits Value Ratio (PVB (NPV) (BCR) £m) Full Network - Ranmoor- LRT 383 286 15 1.06 Rotherham Parkgate plus Dore-Hellaby Royal Hallamshire LRT 94 160 90 2.29 Hospital-Rotherham Parkgate only Meadowhall Interchange- Bus- 25 32 13 1.70 Rotherham Parkgate Based (Next Best) Meadowhall Interchange- Bus- 12 1 -6 0.19 Rotherham Parkgate Based (Low Cost) Royal Hallamshire LRT 183 218 86 1.65 Hospital-Rotherham Parkgate plus extension from Sheffield to Canklow Meadows via Waverley Meadowhall Interchange- Bus 89 60 3 1.06 Rotherham Parkgate plus Based Canklow Meadows- (Next Royall Hallamshire Best) Hospital Meadowhall Interchange- Bus 55 5 -30 0.15 Rotherham Parkgate plus Based Canklow Meadows-Royal (Low Hallamshire Hospital Cost) Schemes Previously Assessed * Northern General LRT 41 -15 -22 Hospital Extension Rotherham Parkgate- LRT 42 -4 -7 Manvers - LRT 54 -9 -17 Lowedges *not re-assessed under new guidance, but unlikely to be substantively different

Further details of the schemes and the appraisals can be found in Appendix A.

Essentially, the Royal Hallamshire-Rotherham Parkgate via Rotherham Town Centre route operating under a Light Rail franchise is the strongest performing route with a BCR of 2.29 and NPV of 90, both well in excess of DfT requirements, and therefore likely to be supported. Including a truncated option for the Dore-Hellaby line (a route from Sheffield City Centre to a Park and Ride site at Canklow Meadows via Waverley/Orgreave), though performing reasonably well in terms of NPV, has a significantly lower cost/benefit ratio (1.65) demonstrating that the additional costs outweigh the additional benefits. Therefore the scheme does not particularly add value as an addition to this route.

In Rotherham, we have expressed a desire for a tram extension that links Rotherham Parkgate with the Town Centre and the Waverley/Orgreave site. Work done in previous studies has indicated that such a route is likely to cost in the region of an additional £200m and will have a less strong case than the extension to Rotherham Parkgate plus the best tram spur or bus based investment package. The latter is likely to cost less and deliver a greater overall cost/benefit case.

In conclusion, from the discussions with DfT and the public consultation, there are significant concerns in moving forward with the originally envisaged network. It is important to recognise that major strategic transport schemes do take many years to deliver and over time public reaction, funding climates and government assessment criteria do change. There is a need for a pragmatic approach which produces the strongest package for resolution of the issues in Sheffield and Rotherham: one which is based around a mix of tram, bus and rail investment.

The PTE propose to hold discussions with all 4 District Councils to develop an agreed integrated package of proposals which reflect the following:

• The strongest performing tram scheme is that between Sheffield University/Hospitals and Rotherham Parkgate. There is the potential to fund this from within South Yorkshire to meet the 25% local contribution requirements (principally through Objective 1 contributions and other funding sources). • An addition to that network would be to look at the ways in which Waverley could be best connected into Sheffield and Rotherham. Before coming to that decision, there needs to be further discussion with Rotherham and Sheffield about the suitability of such extensions as opposed to developing a high-quality bus network based on bus rapid transit. • In the short to medium-term, the solution to Dore and will have to be based around investment in the existing bus and rail networks with a view to possibly looking at a light rail extension in the longer term. • On this basis, the extensions from Sheffield University/Hospitals to Ranmoor, from Sheffield City Centre to Dore and Sheffield to Hellaby should not be pursued in the short to medium term. • There will need to be discussions with all 4 Districts about how these priorities sit alongside other transportation priorities. • There will also need to be further discussion with all of the South Yorkshire Districts on the funding impact and the way in which any scheme is taken forward is developed. • None of the previously considered extensions to the Dearne, Northern General Hospital and Low Edges perform as well individually as the strongest schemes.

11. Risks and Uncertainties

There are no particular risks associated with this report as the matters considered are for information rather than decision. There are many uncertainties, some of which will be resolved when the PTA and District Councils reach a decision regarding which scheme will be promoted.

12. Finance

The operating costs of any extensions will be the subject of a suitable arrangement with the franchise operator and would not in themselves impact on the Council's revenue budget or PTA levy.

As far as the capital costs are concerned, as mentioned above, the Government are adamant that 25% will have to be found 'locally' in the form, for example, of grants from Objective 1 and others, local LTP allocations, the franchisee, developer contributions and resources put in to develop the scheme.

Previous and current stages of the study work and consultations have been funded by the PTE from their existing budgets with help from the Objective 1 programme.

Staff time in the Transportation Unit is funded from the existing revenue budget.

13. Sustainability

The economic, social and environmental benefits of public transport are well known. Light rail particularly is a very sustainable form of transport. Supertram has shown that it does attract existing car users, especially at peak commuting times. The likely reductions in traffic flows on key roads will result in benefits particularly in air quality and afford the opportunity to introduce other measures to support sustainable modes like walking and cycling which will bring further environmental and other benefits to local communities and the wider public. There are diverse local communities adjacent the potential route extensions. By addressing accessibility and severance caused by existing poor quality transport links and by opening up land for development, this project will improve access to jobs and contribute to sustainable development.

14. Wards Affected

All Wards are directly or indirectly affected.

15. References

Appendix A: SYPTE Report to 01/04/04 SYPTA South Yorkshire Supertram Extension Study - Appraisal of Truncated and Alternative Options - Faber Maunsell - March 2004 South Yorkshire Supertram Extensions Study - Final Report - Faber Maunsell - May 2003 Rapid Transit in South Yorkshire - Final Report - Oscar Faber - October 2001 Supertram Extensions Scoping Study - SYPTE - January 2001

16. Presentation

South Yorkshire is working hard to transform its image and economy. We need high quality accessible transport networks to underpin these ambitions. Supertram has been very successful in recent years; many people and businesses benefit from the frequent, reliable, comfortable service it provides. To build on this we are engaging in discussions with the DfT and consultations with the local communities, to see how we can develop proposals which give clear, economic and regeneration benefits for Rotherham.

17. Recommendations

Cabinet Member is asked to: -

(a) note the outcomes of the further study work and discussions with the DfT as summarized in this report, and

(b) refer a copy of this report to Cabinet and Regeneration Scrutiny Panel for information.